Professional Documents
Culture Documents
Premium
Premium
Characteristic of the
Premium
It is Monetary Consideration for the insurer
for a promise to compensate loss.
It can be remitted by the assured personally
or through institution.
Payment of first insurance is the acceptance
of the contract.
Non payment of the premium may cause the
lapse of the policy.
The rate of the premium is determined by
the class of risk involved.
Mortality Rate
Interest Rate
The rate of expenses
Reserve fund
Bonus or guaranteed additions
Age and health conditions
Types of policies
Competitors Rate
Classification of premium
Net Premium: It is a part of the
premium which is essential for
discharging the death or maturity. It
is classified as
Net Single Premium
Net installment premium
Gross Premium:
Calculation of Premium
Net Premium = Mortality Rate + Rate of
Interest
No. of
assured
Assumptions
Premium is collected in the beginning of
the contract
In
Meaning of Premium
Premium is the consideration money that a
policyholder has to pay in lieu of the benefit that
the insurer promises to confer on the happening of
the scheduled eventuality
Types Of Premium:
1. Net Premium: Net Premium is a part of total premium,
Gross premium is
calculated by considering mortality rate, interest rate as well
as administrative and other expenses
Gross Premium = Net premium + Loading
Distribution Channel
A multi-channel strategy is better suited for
the Indian market. Indian insurance market is
a combination of multiple markets. Each of
the markets requires a different approach.
Apart from geographical spread the sociocultural and economic segmentation of the
market is very wide, exhibiting different
traits and needs.
Agents
Banks
Brokers
Internet
Corporate Agents
Banks: Banks in India are all pervasive, especially the public sector banks.
Many insurance companies are selling their products through banks.
Companies which are bank owned, they are selling their products through their
parent bank.
The public sector banks, with their vast branch networks, are helpful to
insurance companies. This channel of selling insurance is known as Bank
assurance.